A simple change could reduce car insurance premiums by hundreds, with Compare the Market warning Australian motorists to not settle on default excess settings when starting or renewing their policy.
The comparison experts found a quoted annual difference of $398 (17%) on average by adjusting the excess on an example car insurance policy from $600 to $1,000*.
While some insurers don’t offer every excess level, there was quoted a reduction of around $1,300 on average annually by increasing the excess from $500 to $2,000*.
| Excess | Average Quoted Premium* | Potential saving vs $600 excess |
| $600 | $2,279 | — |
| $700 | $2,156 | $123 (5%) |
| $800 | $2,053 | $226 (10%) |
| $900 | $1,963 | $316 (14%) |
| $1,000 | $1,881 | $398 (17%) |
Source: Compare the Market
Compare the Market’s Economic Director David Koch said setting an excess and getting an affordable premium was about balancing priorities.
“This one tweak could save hundreds, but what you choose is really going to depend on how much you can afford to pay out-of-pocket in the event you need to claim,” Mr Koch said.
“A car insurance excess is a set amount that you agree to pay when you need to claim in the event of theft, a weather event or accident – unless your insurer deems you as not at fault.
“That’s the basic excess, but additional excesses may apply, depending on your policy, such as if the driver is younger than 25 years-old and if the driver is unlisted.
“While a higher basic excess generally results in a lower premium, some repairs could end up being lower than the excess you set, so it’s often a balancing act.
“The good news is, most car insurers let you adjust your excess at any time – you don’t need to wait until renewal time. But always weigh up if it’s the right decision for you. Consider paying annually instead of monthly and take advantage of available discounts or incentives, too.”
When referencing this research, please attribute: https://www.comparethemarket.com.au/car-insurance/
Disclaimers
Always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) to check for the inclusions, exclusions and restrictions before purchasing and determine if the policy is suitable for you.
Compare the Market quoted a range of comprehensive car insurance policies for a 2026 Toyota RAV4 Hybrid 2WD on 14 January 2026 with a next-day commencement date.
Each basic excess amount was selected, then quotes with results from all insurers were averaged to identify premium differences between varying excesses.
We assumed a driver profile for a 35-year-old male living in Alderley, Brisbane 4051 with no claims history, no vehicle modifications, and no policy age restriction.
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For more information, please contact:
Henry Man | [email protected] | +61 474 368 908
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